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Mr. Joel R. Hanson April 7, 1999 Page 2 The case was tried to a jury on September 3, September 4, and September 5, 1997. Counsel met with Judge Paulette Flynn on September 6, 1997, for most of the day to discuss proposed jury instructions and forms of verdict. The jury case concluded on September 8, 1997. The verdict was received on September 9, 1997 in which the jury determined that the City of Little Canada was entitled to $39,600.00 in liquidated damages. The jury determined that the contractor was entitled to no delay damages or impact damages. After a long battle, the City's position was upheld. In light of this historical background, the question was raised at the Council meeting of March 24, 1999, whether Valley Paving, Inc. (if North Valley, Inc. is the same company) would qualify as a "lowest responsible bidder ". The League of Cities has concluded that courts have held that a city council has reasonable discretion in determining who is the lowest responsible bidder, but in exercising that discretion the council's judgment must be based upon some reasonable ground before a low bid can be rejected. I have been unable to find any Minnesota case in which failure to perform an earlier contract in a timely fashion was a reason for rejection of a bid on a subsequent contract. However, cases in other jurisdictions deal with similar facts. In Haskell-Gilroy. Inc v Young, t_ai, 20 Misc. 2d 294, 189 N.Y.S. 2d 774 (1959), a New York school board awarded a contract to the second lowest bidder. The New York Court, at pp. 295 -296, stated, as follows: "The Board, before rejecting this bid (the lowest bid), not only sought and obtained information through its architect from those for whom petitioner worked in the past, but also engaged an investigative agency, The Long Island Reports, to look into petitioner's background. None of that information was such as to inspire confidence in petitioner's Page 3